The UNITED states Attorney’s Office of Massachusetts has indicted several former eBay Inc. (EBAY) employees on charges that they threatened a blogger and her husband for revenge against critical comments made against the retail giant in 2019. The company has responded with a public statement insisting on the fact that no current employee was involved while admitting that an internal investigation was conducted after law enforcement officials make them aware of the potential costs in August 2019.
eBay has also admitted that an independent special committee was formed to study the issue, leading to the September 2019 end of the “security staff.” Until here everything goes well, but the last part of the press is a potential market mover, as it was revealed that “non-specified” communication of the former ceo Devin Wenig were “inappropriate”, but that he was not aware of the possibility of a criminal action.
Dirty Tricks Of The Campaign
It is unsettling because Little has also got fired in September, after complaining to a “colleague” about the blogger coverage of a trial with Amazon.com, Inc. (AMZN), in the EcommerceBytes newsletter, stating, “If you ever go to take it down … this is the time.” The connection between these observations and the potential of criminal prosecution remains ambiguous, causing the theories that they were the management of the led, while the committee of inquiry whitewashed the meeting room of the participation in the casting of lower-level workers under the bus.
As a result, the arrest of two former senior security officials and four other employees will leave eBay at risk for months. For a start, the defense lawyers are likely to file Wenig and other high-ranking officers while pressing their clients to deepen the links between the chief executive officer of the original complaint, and “dirty tricks” which included the live broadcast of the cockroaches, and a fucking pig Halloween mask. More importantly, the path to trial could include new charges against the board room executives.
eBay stock had been on a roll, rallying to return to the 2018 high earlier this month of June and breaking a record high of $51.88. It has been pulling back since that time, preliminary reports on the scandal of working their way into the rumor mill. The downtick comes to reach the new bracket in the upper part of $40, allowing market observers to assess the short-term impact of the news, but it could be weeks or months for the deeper truth to come out.
EBAY Long-Term Chart (1998 – 2020)
The creation of the public company at a split adjusted 82 cents in September 1998 and entered in a bullish trend which went vertical in 1999, lifting the stock to $12.15 in May, before a pullback that found support at$ 3.65. It rallied back to the resistance of the range in March 2000 and has surpassed this level by just one point before the turn, the tail of the failure of the escape and modest downward trend that ended at a two-year low at the end of the year. In 2004, a breakout topped out at $24.60 in 2005, marking a high that was not in question, for the next nine years.
The stock posted an eight-year low in the single digits during the economic collapse of 2008 and turned over in the new decade, reaching within a point of 2005 of the resistance in the first quarter of 2012. Finally, she broke out in 2015, entering a choppy uptrend that has carved a series of new highs and lows stiff in the last five years. The price action between the months of February, June, 2018, and 2020, supplemented by a wide rectangular pattern, with the support in the middle of$20 and the resistance in the upper $40. The stock mounted resistance in the range of four points this month before retreating in a key test support.
The monthly stochastic oscillator is raised in a very level of overbought that triggered five sell cycles since 2009, but the timing of a bearish cross is not easy to predict. More importantly, the stock has pushed more than 50% outside the top 20-month of the Bollinger Band®, marking a high score of model for a trade-in and multi-week decline, similar to what happened in 2018. It is possible that damage to the criminal revelations will trigger the failure of the swing.
The Bottom Line
eBay stock has broken out to a new high, but troubling allegations regarding the business of processing of an information bulletin of the writer and her husband could have bearish implications in the long term.
Disclosure: The author held no positions in the aforementioned securities at the time of publication.